Fonterra linked to milk powder scandal 

New Zealand dairy export giant Fonterra is being linked to a scandal in China over contaminated milk.
 
One baby has died and more than 400 others are sick after drinking formula produced by a company partly owned by Fonterra.  

Chinese health ministry officials are fronting up to a baby food scandal.

"We will severely punish the criminals when the crimes are confirmed by the public security departments. In fact we have detained 19 suspects and summoned 78 people," says Yang Chongyong, deputy governor of Hebei province.

The ministry is investigating Sanlu milk powder that has killed one infant and hospitalised 432 other babies from around the country with kidney stones.

Sanlu Group has admitted around 700 tonnes of its formula has been contaminated with melamine, a substance used in plastics, fertilisers and cleaning products, to make the milk's protein levels appear higher than they were.

The company has also acknowledged it received complaints about babies suffering renal problems as early as March.

"According to an investigation, Sanlu milk powder was only exported in small parts to Taiwan for food producing. All other products were sold in the Chinese domestic market and never exported to other countries or regions," says Gao Quiang, a senior health ministry official.

Sanlu is partly owned by Fonterra which has a 43% stake in the company.

"From the day that we were advised of the product contamination issue in August, Fonterra called for a full public recall of all affected product," Fonterra says in an emailed statement.

"Consumer safety has always been our number one priority. Fonterra's representatives in China are seeking a meeting with the government to discuss this issue."

Fonterra refused an interview. But the company should be fronting up, according to food safety advocate, Sue Kedgley.

Basically, in a situation like this, it is incumbent on Fonterra to be open and upfront. Depending on the level of Fonterra's involvement, there are potentially very serious repercussions for Fonterra's global reputation," says Kedgley.

Meanwhile it's not the first time China's food product safety has come into question.

In 2004, at least 13 babies died after drinking fake milk powder that had no nutritional value.
Health officials say since then there has been stricter monitoring.

Sanlu has since halted production and recalled over 8,000 tonnes of its infant formula, hoping no more babies will need hospital care.